Sports Entertainment Group (ASX: SEG) is set to acquire New Zealand’s leading audio business MediaWorks for NZ$130 million, creating a dominant trans-Tasman media group with over 5 million weekly listeners and significant earnings accretion.
- Acquisition valued at NZ$130 million (A$107.4 million)
- Expected 59% EPS accretion pre-synergies
- Annual synergies of approximately A$5 million identified
- Combined proforma EBITDA of A$41.1 million post-synergies
- Equity raising and senior debt facility to fund deal
SEG Secures Market Leadership in New Zealand
Sports Entertainment Group Limited (ASX:SEG) has agreed to acquire 100% of MediaWorks Topco Limited, New Zealand’s top audio business, for NZ$130 million (around A$107.4 million). The deal positions SEG as a leading trans-Tasman audio and entertainment powerhouse, combining MediaWorks’ commanding 59% audience share in the 25–54 demographic with SEG’s Australian sports audio network to reach over 5 million weekly listeners across both countries.
MediaWorks brings a robust mix of music and entertainment radio, alongside its digital platform rova, which boasts more than 540,000 monthly active users and is growing at a projected 32% CAGR through FY26. SEG plans to leverage this digital asset in tandem with its SEN digital platform to accelerate growth, targeting 800,000 monthly users by FY30.
Financial Upside and Synergies Drive Accretive Deal
The acquisition is expected to deliver a substantial 59% increase in SEG’s earnings per share on a pre-synergy basis, supported by identified annual synergies of approximately A$5 million. On a proforma basis, the combined EBITDA stands at about A$36.1 million before synergies and rises to A$41.1 million after synergy realisation.
SEG’s FY26 financials show strong momentum with unaudited revenue of $152.8 million, a 38% increase on FY25, and normalised EBITDA of $18 million, up 71%. The company ended the year with $24 million in cash and $10 million in debt, setting a solid foundation for the acquisition and subsequent growth.
Funding Structure Balances Growth and Leverage
The NZ$130 million deal will be funded through a combination of SEG’s existing cash reserves, an $87.6 million senior debt facility arranged with Commonwealth Bank of Australia, and an equity raising comprising a placement of up to A$11.7 million and a Share Purchase Plan (SPP) targeting A$2 million. The placement is priced at A$0.28 per share, representing an 8.2% discount to the last traded price, and is expected to close mid-August.
Post-completion, leverage is projected at approximately 1.9x proforma FY26 EBITDA including synergies, with a clear path to reduce this to around 1.2x within two years. The acquisition also leverages available New Zealand tax losses and strong free cash flow generation from MediaWorks, which has over 80% free cash conversion and modest capital expenditure needs.
Strategic Implications and Leadership Continuity
SEG’s CEO Craig Hutchison described the acquisition as transformational, providing immediate market leadership in New Zealand and a complementary content mix that broadens audience and advertiser appeal. The deal also offers a platform to extend SEG’s sports, events, and entertainment offerings across the Tasman.
MediaWorks’ current CEO Wendy Palmer and her management team are expected to remain in place, ensuring continuity as the two businesses integrate. Completion is targeted for 1 October 2026, pending customary conditions including approval from the New Zealand Overseas Investment Office.
Corporate Actions and Shareholder Considerations
In light of the acquisition and equity raising, SEG has terminated its on-market share buy-back program initiated earlier in 2026. The company has also engaged Bell Potter Securities and PAC Partners as joint lead managers for the placement, with Deloitte and legal advisers Malcolm Webb and Pinsent Masons supporting the transaction.
Investors should note the upcoming SPP opening on 21 August 2026, offering eligible shareholders the chance to participate at the same price as the placement. The acquisition and capital raising mark a significant evolution for SEG, reshaping its footprint and financial profile in the competitive media landscape.
Bottom Line?
SEG’s acquisition of MediaWorks sets the stage for a dominant trans-Tasman audio group, but execution of synergies and regulatory approvals will be critical to watch.
Questions in the middle?
- How swiftly will SEG integrate MediaWorks to realise the identified A$5 million in synergies?
- What impact will the increased leverage have on SEG’s financial flexibility amid market uncertainties?
- Will the combined digital platforms, rova and SEN, achieve the projected user growth targets by FY30?